Eels Blogs

Interview for Michael Hagan very interesting read on TPA'S

THE salary cap has been a ticking time bomb since 2011, when the rules around lodging genuine third party agreements were relaxed.

So it was no surprise to me to hear the NRL say evidence of Parramatta’s salary cap rort dated back six years, coinciding with the league’s new approach to this complex aspect of NRL players’ contracts.

SPIRALLING OUT OF CONTROL

That’s when temptation grew and there’s a chance other clubs besides the Eels have stepped across the line in some way, albeit perhaps more stealthily.

In the lead up to 2011 the league was having trouble policing the level of unregistered third party payments as the wealthy clubs built their rosters and improved their high performance centres.

Instead of throwing more resources at policing TPAs and tightening compliance measures around them, the NRL decided to go the other way.

As this situation has been exploited, the stronger clubs have registered and unregistered third party payments, which means the league is not exactly sure how much is invested in player salaries.

This by its nature has created an uneven playing field and created some uncertainty for the players as their managers negotiate a contract with the clubs and third party companies simultaneously but without the direct assistance of anyone from within the club, as it has to be under the current rules.

That’s not an easy tightrope for the manager to walk but coincidentally, or miraculously, the contracts get agreed, then lodged with the league for their approval.

The league will argue there is sufficient compliance and enough rules to ensure the game’s financial health and integrity is maintained at the moment.

But looking from the outside in, it would appear that the majority of clubs are working within the rules but some have the capability to work outside them with sophisticated third party plans.

The uneven playing field, which has allowed the gap between the rich and poor clubs to widen in terms of total player payments, should have alarm bells ringing at NRL headquarters and the current scenario needs to change.

HOW TO FIX IT

There’s a simple way to do this: cap the level of registered third party payments for each club or the top five players at each club.

Allow current sponsors of the clubs or the game to enter into agreements with these players legitimately. Allow them to use the intellectual property around the game.

NEXT STEP: Players, managers to be probed

Ensure third party contracts are legally binding and ensure the league (or the clubs) must underwrite the third party payments to ensure these contracts are honoured in full.

To police this, the NRL also needs to introduce a stronger set of sanctions against the player agents who actively facilitate dishonest player payments that are outside the game’s rules.

Why not have an independent panel to assess the current market value of each player at each club to ensure contracts lodged within the cap accurately reflect their value?

PARRA’S MOTIVES

New regulations around TPAs will help the NRL better police player contracts but at the end of the day there will always be ways for clubs to do things outside the rules.

So I am more intrigued with the motives and the practices that have led the Eels to have broken the cap substantially — over by more than $500,000 this year — and been in breach of the cap for five of the past six years.

We are talking about a wealthy, once successful football club that has failed to achieve in recent times and was prepared to take risks to put this once proud club back on the road to success, using any means possible.

With the backing of a highly profitable leagues club and strong corporate support, the Eels have apparently become caught up in the spiralling player payments scenario that has put them in this desperate situation.

In essence it comes down to a lack of leadership and integrity, which has not given the league much option other than to hand down a season ending sanction.

Parramatta’s clear aspirations to win a competition for the first time since 1986 and a win at all costs attitude has seen them assemble a high quality roster, including the signatures of Kieran Foran, Beau Scott, Michael Gordon and Anthony Watmough in 2015.

To do that, what’s become clear is the club compromised its cap position with illegitimate third party deals it thought it could hide.

THE RIPPLE EFFECTS

Our game’s track record of finding a huge scandal at the wrong time is incredible.

On the eve of the representative round and a new look Kangaroos agenda — the game has once again been hijacked by an off-field issue.

While Mal Meninga has been talking about lifting the profile of the Kangaroos in the lead up to a Test against the Kiwis on Friday night, the spotlight has been shining in a place that doesn’t help the game.

The game, the club, the players and the fans have been left in a state of despair as the Eels contemplate the stressful situation of releasing players immediately and working through the complicated process of re-evaluating the value of player contracts and the processes that needs to be followed.

Some strong decisions have been taken by the league under the leadership of Todd Greenberg and plenty of work needs to be done in putting the necessary governance around the Eels going forward.

- Michael Hagan is a former head coach of the Parramatta Eels